US economic data falling short of expectations bolstered hope that the Federal Reserve might see the need to support the world's largest economy a little longer than it has recently hinted.
The economy grew at a 2.4 per cent annualised rate in the first quarter, according to the Commerce Department. That was down from an earlier estimate of a 2.5 per cent pace of expansion in the period. Government spending tumbled at a 4.9 per cent annual rate in the first three months of the year, while consumer spending increased at a 3.4 per cent annual clip.
Separately, the National Association of Realtors' index of pending house sales increased 0.3 per cent in April, short of expectations and down from the 1.5 per cent climb in March. Even so, it was the highest reading since April 2010.
"The take away from today's statistics is that there's going to continue to be a bias to keep QE [quantitative easing] in place," Matthew Kaufler, fund manager at Federated Investors in Rochester New York, told Bloomberg News.
The dollar dropped to a three-week low versus the euro. The yen gained versus the greenback after Reuters reported that Japan's public pension fund may allow its investment in domestic stocks to grow, citing unnamed people familiar with the matter.